Commercial Lease Letter of Intent (Single-Tenant) - Colorado

LETTER OF INTENT FOR COMMERCIAL LEASE — SINGLE-TENANT PROPERTY

STATE OF COLORADO

CONFIDENTIAL — FOR NEGOTIATION PURPOSES ONLY

Date: [__/__/____]

LOI Reference No.: [________________________________]

IMPORTANT NOTICE REGARDING NON-BINDING EFFECT: This Letter of Intent ("LOI") sets forth the principal business terms for the lease of a single-tenant property. Except for provisions expressly identified as binding in Section 21 below, this LOI shall not create any legally binding obligation. Under Colorado law, contracts for leasing real property for a period longer than one (1) year are void — not merely voidable — unless in writing and signed by the party to be charged (C.R.S. § 38-10-108).

1. PARTIES

Landlord:

Tenant:

2. PREMISES

• Property Address: [________________________________], [________________________________], Colorado [____]
• County: [________________________________]
• Municipality: ☐ Denver ☐ Colorado Springs ☐ Aurora ☐ Boulder ☐ Fort Collins ☐ Lakewood ☐ Longmont ☐ Other: [________________________________]
• Legal Description: ☐ Per Exhibit A ☐ To be confirmed by survey
• Building Size: Approximately [________________________________] square feet
• Land Area: Approximately [________________________________] acres
• Property Type: ☐ Office ☐ Retail ☐ Industrial / Warehouse / Distribution ☐ Flex ☐ Medical ☐ Data Center ☐ Cannabis Facility (see note) ☐ Other: [________________________________]
• Year Built / Renovated: [____] / [____]
• Zoning: [________________________________]
• Altitude: Approximately [________________________________] feet above sea level
• Clear Height (Industrial): [____] feet
• Dock Doors / Grade Doors: [____] / [____]
• Power: [____] amps / [____] volts / ☐ 3-phase

Single-Tenant Note: As sole occupant, Tenant assumes comprehensive property responsibility. The Lease must clearly delineate all structural, systems, site, and environmental obligations. Colorado's unique construction defect laws (CDARA), property tax system (29% commercial assessment rate, TABOR), and emerging green building mandates add layers of complexity to single-tenant lease negotiations.

3. LEASE STRUCTURE

• ☐ Absolute Triple Net (NNN): Tenant pays all Operating Expenses, Taxes, Insurance, and is responsible for all maintenance, repairs, and replacements (including roof, structure, and parking)
• ☐ Triple Net (NNN) — Modified: Tenant pays all Operating Expenses, Taxes, Insurance; Landlord retains roof and structural repair/replacement responsibility
• ☐ Double Net (NN): Tenant pays Taxes and Insurance; Landlord handles structural and site maintenance
• ☐ Modified Gross: Landlord includes [________________________________] in Base Rent
• ☐ Ground Lease: Tenant leases land and constructs improvements (see Section 9)
• ☐ Build-to-Suit: Landlord constructs to Tenant's specifications (see Section 8)

4. LEASE TERM AND COMMENCEMENT

• Initial Term: [____] years [____] months
• Anticipated Commencement Date: [__/__/____]
• Rent Commencement Date: [__/__/____] or upon:
• ☐ [____] days following Delivery
• ☐ Substantial Completion of Landlord's Work / Build-to-Suit
• ☐ Certificate of Occupancy
• ☐ Tenant's opening for business
• ☐ Other: [________________________________]
• Lease Expiration Date: [__/__/____]
• Fixturing Period: [____] days prior to Rent Commencement, rent-free

5. DELIVERY OF PREMISES

5.1 Delivery Condition

• ☐ Turnkey / Built-Out per approved plans
• ☐ Warm Shell (HVAC, electrical, plumbing; weather-tight; insulated for Colorado climate)
• ☐ Cold Shell (structural shell only)
• ☐ Existing Condition / As-Is with Landlord representations
• ☐ Pad-Ready (Ground Lease — graded, utilities to lot line, soils report provided)
• ☐ Other: [________________________________]

5.2 Delivery Timeline

• Target Delivery: [__/__/____]
• Outside Delivery Date: [__/__/____]
• Late Delivery Remedies:
• ☐ One (1) day free rent per day of delay
• ☐ [____] days free rent per day of delay
• ☐ Termination right if delay exceeds [____] days
• ☐ Liquidated damages: $[____]/day
• ☐ Other: [________________________________]

Colorado Construction Seasonality: Colorado's construction season is affected by significant winter weather, particularly at higher elevations. Front Range areas can receive heavy snowfall from October through April. Mountain locations may have even shorter construction windows. Concrete pours, roofing, and exterior work may be restricted during cold weather. Force majeure provisions should specifically address winter weather delays and should set realistic timelines that account for seasonal limitations.

6. RENT

6.1 Base Rent Schedule

• Escalation: ☐ Fixed % ([____]%) ☐ Fixed $ ($[____]/SF) ☐ CPI (Denver-Aurora-Lakewood MSA) with [____]% floor / [____]% cap ☐ FMV reset every [____] years

6.2 Additional Rent (NNN Charges)

Real Estate Taxes:

• Estimated Year 1: $[____]/SF (total: $[________________________________])

Colorado Property Tax — CRITICAL INFORMATION:

Colorado's commercial property tax system contains several features that critically impact single-tenant NNN lease economics:

Assessment Rate: Nonresidential property is assessed at 29% of actual value (C.R.S. § 39-1-104). This rate was frozen by statute following the 2020 repeal of the Gallagher Amendment. At 29%, Colorado's commercial assessment rate is among the highest in the nation and results in a significantly higher effective tax rate on commercial versus residential property.

TABOR Constraints: The Taxpayer's Bill of Rights (Colo. Const. Art. X, § 20) limits government revenue growth and generally prevents mill levy increases without voter approval. However, TABOR does not prevent assessed value increases resulting from reappraisals or new construction — only mill levy increases.

Reappraisal Cycle: Colorado reappraises property biennially (odd-numbered years) using an 18-month data window. Significant value increases can occur during reappraisal years, particularly in rapidly appreciating markets (Denver metro, mountain resort communities, Colorado Springs).

Metropolitan Districts: Many Colorado commercial properties sit within one or more metropolitan districts (C.R.S. § 32-1-101 et seq.) that impose additional mill levies — sometimes substantial. Combined effective tax rates can exceed 100 mills (10%) in heavily districted areas.

For Single-Tenant NNN: The entire property tax burden falls on Tenant. Negotiate:
- Right to receive copies of all assessment notices and tax bills promptly
- Right to protest assessments (directly or through Landlord at Tenant's cost)
- Clear identification of all applicable taxing jurisdictions and metro districts
- Allocation of costs for tax appeals and refunds

• Metropolitan District(s): ☐ Yes — Name(s): [________________________________]; Additional mills: [____] ☐ No ☐ Unknown (to be verified)
• Tax Protest Rights: ☐ Tenant may protest directly ☐ Landlord protests at Tenant's request/cost ☐ Costs and refunds shared

Insurance:

• Estimated Year 1: $[____]/SF
• In NNN lease, Tenant carries and pays for all property insurance (replacement cost basis)

Colorado Insurance Considerations:
- Hail: Colorado ranks among the top states for hail damage claims. Ensure adequate coverage with reasonable deductibles. Large hail events (2017, 2023) caused billions in damage along the Front Range.
- Wildfire: Properties in the wildland-urban interface (WUI) face elevated risk, particularly along the Front Range foothills (Boulder County, Jefferson County, Douglas County, El Paso County). The Marshall Fire (December 2021) demonstrated that even suburban commercial areas can be affected.
- Snow Load: At higher elevations, building design must account for significant snow loads. Verify that the building's structural capacity meets current codes.
- Flood: Flash flooding is a risk along Colorado's waterways. Check FEMA flood zone status. Some areas may require flood insurance.

Operating Expenses / Maintenance (Single-Tenant NNN):

• Estimated Year 1: $[____]/SF

Landlord vs. Tenant Responsibility Matrix:

6.3 Free Rent / Abatement

• Period: [____] months ☐ Base Rent only ☐ Base Rent and NNN
• Recapture upon Default: ☐ Yes ☐ No

6.4 Security Deposit / Letter of Credit

• Amount: $[________________________________] (equivalent to [____] months' rent)
• Form: ☐ Cash ☐ Irrevocable Standby LOC ☐ Guaranty (Section 6.5)
• Burn-Down: Reduced to $[________________________________] after Year [____]

Colorado Note: C.R.S. § 38-12-101 et seq. governs residential security deposits but does not apply to commercial leases. Commercial deposit terms are purely contractual.

6.5 Guaranty

• ☐ Personal Guaranty from: [________________________________]
• ☐ Corporate / Parent Guaranty from: [________________________________]
• ☐ Limited Guaranty ($[________________________________] / [____] years)
• ☐ Good-Guy Guaranty
• ☐ No Guaranty

7. TENANT IMPROVEMENTS

7.1 TI Allowance

• Amount: $[____]/SF (total: $[________________________________])
• Application: ☐ Hard costs ☐ Hard and soft costs ☐ FF&E ☐ Cabling
• Unused: ☐ Forfeited ☐ Rent credit ☐ Cash payment
• Disbursement: ☐ Progress payments with lien waivers ☐ Upon completion

7.2 Landlord's Work

• Scope: [________________________________]
• Completion: [__/__/____]
• Punch list: [____] days

7.3 Construction Defect — CDARA (C.R.S. § 13-20-801 et seq.)

Colorado-Specific — CDARA Applies to Tenant Improvements:

The Construction Defect Action Reform Act governs any claim against a "construction professional" for defects in design or construction of improvements to real property. Key considerations for single-tenant lease TI work:

• Notice of Claim (NOC): Required before filing any defect action. The construction professional has 90 days to respond for commercial properties.
• Statute of Limitations: Two years from discovery of defect (C.R.S. § 13-80-104).
• Statute of Repose: Six years from substantial completion (C.R.S. § 13-80-104).
• Waiver Risk for Commercial Properties: Unlike residential owners protected by the Homeowner Protection Act, commercial owners may unknowingly waive CDARA protections through construction contract terms. Review all GC and subcontractor agreements for exculpatory clauses, limitation of liability provisions, and indemnification terms.
• Allocation in Lease: Landlord bears responsibility for base building defects (if applicable). Tenant bears responsibility for defects in Tenant-constructed improvements. The Lease should require mutual notice of discovered defects and cooperation in pursuing claims.

7.4 ADA and Code Compliance

• Landlord represents Building complies with ADA and codes as of Delivery
• Tenant responsible for ongoing compliance
• Code upgrades from improvements: ☐ Tenant ☐ Landlord ☐ Shared
• Colorado energy code compliance (IECC as adopted by municipality, or Colorado Energy Code)

8. BUILD-TO-SUIT PROVISIONS (IF APPLICABLE)

• Design: ☐ Landlord's architect per Tenant program ☐ Tenant's architect
• GC: ☐ Landlord-selected ☐ Tenant-selected ☐ Mutually agreed
• Budget: $[____]/SF or GMP of $[________________________________]
• Cost Overruns: ☐ Landlord ☐ Tenant ☐ Shared beyond [____]%
• Timeline: [____] months from permit issuance
• Substantial Completion: Per plans, all approvals obtained, CO issued
• Warranty: [____] year(s); manufacturer warranties assigned to Tenant

Colorado Build-to-Suit Considerations:
- Altitude: HVAC, plumbing, and mechanical systems must be designed for altitude. Equipment rated for sea-level performance may underperform at Colorado elevations (5,000-10,000+ feet). Boiler de-rating, fan adjustments, and combustion tuning are standard requirements.
- Expansive Soils: Many areas along Colorado's Front Range have highly expansive clay soils (bentonite) that can cause significant foundation movement. Geotechnical reports and engineered foundation designs are essential.
- Snow Load: Building design must account for local snow load requirements, which vary significantly from the plains to mountain locations.
- CDARA: Ensure all construction contracts preserve CDARA rights and do not inadvertently waive defect claim protections.
- Energy Code: Compliance with the applicable energy code (varying by municipality — some have adopted more stringent standards than the state baseline).
- Green Building: If located in Denver, Boulder, or other municipalities with green building mandates, ensure the build-to-suit complies.
- Radon: Colorado has elevated radon levels. New construction should include radon mitigation systems per EPA guidelines and local building code requirements (C.R.S. § 25-11-104 et seq. regarding radon measurement).

9. GROUND LEASE PROVISIONS (IF APPLICABLE)

• Land Only: Tenant leases land and constructs all improvements
• Ground Rent: $[____] per annum, escalating [____]% every [____] years
• Improvement Ownership During Term: ☐ Tenant ☐ Landlord
• Reversion: ☐ Improvements revert to Landlord ☐ Tenant removes ☐ Landlord purchase option
• Leasehold Financing: Permitted with Landlord approval; lender protections (notice, cure, new lease) required
• Water/Mineral Rights: Confirm status of water rights (Colorado follows the prior appropriation doctrine — water rights are separate from land ownership). Mineral rights may also be severed from surface rights in Colorado; confirm mineral estate status to avoid surface use conflicts.

Colorado Ground Lease Note: Colorado's prior appropriation water rights system means water rights do not automatically follow land ownership. For ground lease properties requiring water (industrial, agricultural, or high-water-use commercial), confirm water rights and tap fees with the applicable water district. Mineral rights in Colorado are frequently severed from surface rights, creating potential conflicts with surface use — particularly relevant for properties in oil/gas producing areas.

10. PURCHASE OPTION (IF APPLICABLE)

• ☐ Tenant option to purchase:
• Exercise after Year [____]
• Price: ☐ Fixed $[________________________________] ☐ FMV ☐ Formula: [________________________________]
• Notice: [____] months
• Closing: [____] days from exercise
• Due Diligence: [____] days
• Title: Special warranty deed or general warranty deed; title insurance
• Documentary fee: Colorado imposes a real estate transfer documentary fee of $0.01 per $100 of consideration (C.R.S. § 39-13-102)
• ☐ ROFR on Sale: [____] business days to match
• ☐ No Purchase Option

Colorado Note: Purchase options must comply with C.R.S. § 38-10-108 (Statute of Frauds). Record a memorandum of lease referencing the option. Colorado does not have a traditional transfer tax but does impose a documentary fee. Real Estate Commission-approved forms are commonly used for closings but are not required for commercial transactions.

11. RENEWAL OPTIONS

• Number: [____] options of [____] years
• Rent: ☐ FMV per Section 20 ☐ Fixed [____]% ☐ Greater of FMV or [____]% ☐ CPI (Denver-Aurora-Lakewood MSA) with [____]% floor / [____]% cap
• Notice: [____] months prior
• Conditions: No uncured default

12. SIGNAGE

• ☐ Exclusive building-top signage
• ☐ Monument / pylon signage at entrance
• ☐ Building-mounted signage on [____] facade(s)
• ☐ Directional signage
• All at Tenant's cost; subject to municipal code and CC&Rs

Colorado Signage: Municipal sign codes vary widely. Denver (DRMC Ch. 10, Art. XIII), Boulder, Colorado Springs, and mountain communities each have distinct regulations. Mountain resort towns (Vail, Aspen, Breckenridge, Telluride, Steamboat Springs) typically impose strict design, material, and illumination standards consistent with community character. Verify all applicable requirements and obtain permits before installation.

13. PARKING

• Total Spaces: [____] (exclusive use)
• Ratio: [____] per 1,000 SF
• ☐ Surface ☐ Covered / structured ☐ Both
• Trailer / truck court: ☐ [____] spaces ☐ N/A
• ADA spaces: [____]
• EV charging: ☐ Existing: [____] ☐ To be installed: [____] ☐ None

Colorado Parking and TDM: Denver and Boulder have transportation demand management (TDM) requirements that may affect parking ratios or require alternative transportation amenities. Denver's Green Buildings Ordinance may require EV-ready infrastructure. Colorado's Front Range air quality non-attainment status under the Clean Air Act may result in additional transportation-related requirements for large employers.

14. ASSIGNMENT AND SUBLETTING

• Landlord consent required (not unreasonably withheld)
• Permitted Transfers: Affiliates; merger/acquisition with net worth minimum of $[________________________________]
• Recapture: ☐ Yes ☐ No
• Profit Sharing: ☐ [____]% to Landlord ☐ None

15. INSURANCE AND INDEMNIFICATION

• Mutual indemnification; mutual waiver of subrogation
• Tenant names Landlord as additional insured
• NNN: Tenant carries all property insurance (replacement cost)

Colorado Insurance — Key Considerations:
- Hail: Colorado's hail exposure is among the most severe in the nation. Negotiate specific hail coverage and clarify deductible allocation (some policies have separate, higher hail/wind deductibles). For single-tenant NNN, Tenant typically bears all insurance costs and deductibles.
- Wildfire: Properties in the WUI face heightened risk. The Marshall Fire destroyed 1,084 structures in Boulder County. Confirm availability and cost of wildfire coverage.
- Flood: Flash flooding along Colorado waterways. Check FEMA maps. Cherry Creek, South Platte, Bear Creek, and mountain drainages are particular areas of concern.
- Snow/Ice Liability: Premises liability for slip and fall; Lease must clearly allocate responsibility.
- Radon: While not typically insured, radon mitigation costs may arise. Confirm baseline radon testing has been performed.

16. SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT (SNDA)

• SNDA from lender(s) within [____] days of Lease execution
• Non-disturbance of Tenant if no default
• Ground lessor estoppel if applicable

17. BROKERS

• Landlord's Broker: [________________________________] (Colorado License No. [________________________________])
• Tenant's Broker: [________________________________] (Colorado License No. [________________________________])
• Commission: Per separate agreement

Colorado Broker Requirements: Under C.R.S. § 12-10-201 et seq., all real estate brokers must be licensed. Colorado mandates that all agency/listing employment agreements be in writing (C.R.S. § 12-10-403). Colorado requires disclosure of the broker's relationship type using the mandatory Brokerage Disclosure form: (a) single agent of one party, (b) transaction broker (default relationship), or (c) customer relationship. Transaction brokerage is the default unless otherwise agreed in writing. Brokers owe varying duties depending on the relationship type.

• Mutual broker indemnification.

18. UTILITIES AND INFRASTRUCTURE

• Electric: ☐ Xcel Energy ☐ IREA ☐ Colorado Springs Utilities ☐ Other: [________________________________]
• Gas: ☐ Xcel Energy ☐ Atmos Energy ☐ Colorado Natural Gas ☐ Other: [________________________________]
• Water/Sewer: ☐ Denver Water ☐ Municipal ☐ Special district: [________________________________] ☐ Well (confirm augmentation plan)
• Telecom/Fiber: [________________________________]
• Power Capacity: [____] amps / [____] volts; adequate: ☐ Yes ☐ Upgrade needed
• Solar: ☐ Existing ☐ Solar-ready ☐ Tenant may install with approval ☐ N/A
• Utility costs: ☐ Direct to Tenant ☐ NNN ☐ Separately metered

Colorado Utility Notes:
- Colorado's altitude affects combustion appliance performance (natural gas boilers, furnaces, water heaters must be de-rated for altitude).
- Water tap fees in Colorado can be substantial (some districts charge $20,000+ per commercial tap). Confirm tap fee status and adequacy of water allocation.
- Xcel Energy is the primary electric and gas provider along the Front Range. Colorado's Renewable Energy Standard requires utilities to obtain increasing percentages of energy from renewable sources.
- For properties on well water, confirm the well permit and any required augmentation plan with the Colorado Division of Water Resources.

19. ENVIRONMENTAL AND SUSTAINABILITY

19.1 Environmental Representations

• Landlord represents (to actual knowledge):
• ☐ No Hazardous Materials in violation of law
• ☐ Not on CDPHE VCRP or Brownfields registry
• ☐ No USTs (or: [________________________________])
• ☐ No pending environmental actions
• ☐ No active or abandoned oil/gas wells on or adjacent to Property
• ☐ Radon testing performed: results [________________________________] pCi/L (EPA action level is 4.0 pCi/L)
• Phase I/II ESAs within [____] business days
• Due diligence period: [____] days
• Pre-existing contamination: ☐ Landlord ☐ Shared ☐ Other: [________________________________]

Colorado Environmental Notes:
- CDPHE Oversight: The Colorado Department of Public Health and Environment administers the Voluntary Cleanup and Redevelopment Program (VCRP, C.R.S. § 25-16-301 et seq.) and Brownfields programs. Check whether the Property has a VCRP "no action" determination or a "no further action" letter.
- Mining Contamination: Colorado's mining history means some commercial properties (particularly in mountain communities, the Western Slope, and areas near former smelters) may have legacy heavy metal contamination in soils.
- Oil and Gas: The Colorado Energy and Carbon Management Commission (ECMC, formerly COGCC) regulates oil and gas operations. For properties near producing areas (Weld County, Adams County, Garfield County), confirm proximity to active wells and compliance with current setback rules. Abandoned wells may pose environmental and safety risks.
- Radon: Colorado has some of the highest radon levels in the nation. EPA recommends mitigation for readings above 4.0 pCi/L. The definitive Lease should address radon testing, mitigation, and cost allocation (C.R.S. § 25-11-104 et seq.).
- Methane: Some areas along Colorado's Front Range have naturally occurring methane in soils. Building codes in certain jurisdictions (e.g., parts of Douglas County) may require methane mitigation systems.

19.2 Green Building and Energy Compliance

Colorado Green Building Requirements — Increasingly Important:

• Denver Green Buildings Ordinance: Applies to commercial buildings over 25,000 SF. Requires energy benchmarking, performance standards, and electrification requirements for certain building systems. The Energize Denver program imposes escalating energy performance targets.
• Boulder Building Performance Ordinance: Applies to commercial buildings over 20,000 SF with energy performance requirements.
• Colorado HB 21-1286: Established statewide greenhouse gas reduction targets. While primarily affecting utilities and state operations, the law signals Colorado's policy direction toward stricter commercial building energy standards.
• Front Range Ozone Non-Attainment: The Denver metro/North Front Range area is in ozone non-attainment under the Clean Air Act. This may result in additional emissions-related requirements for certain commercial operations.

The Lease should address:
- ☐ Compliance with local energy benchmarking requirements
- ☐ Cost allocation for mandated energy efficiency upgrades
- ☐ Data sharing for utility consumption reporting
- ☐ Solar installation rights and net metering agreements
- ☐ EV charging infrastructure

20. FAIR MARKET VALUE DETERMINATION (IF APPLICABLE)

1. Negotiation: [____] days from exercise.
2. Broker Determination: Each party appoints a licensed Colorado commercial broker with [____]+ years in the [________________________________] market. If determinations within [____]%, average. Otherwise, baseball arbitration.
3. FMV Definition: Rental rate for comparable single-tenant properties of similar size, quality, age, and location in the [________________________________], Colorado market, considering concessions, excluding Tenant-funded improvements and goodwill. FMV shall reflect the same lease structure (NNN, modified gross, etc.) as the Lease.

21. BINDING PROVISIONS

Legally binding upon execution:

21.1 Exclusivity

Landlord shall not market or negotiate the Premises during the Exclusivity Period (through [__/__/____]).

21.2 Confidentiality

All terms confidential except to professional advisors. No press releases without mutual consent.

21.3 Broker Indemnification

Section 17 obligations are binding.

21.4 Governing Law and Venue

Colorado law. Exclusive jurisdiction in [________________________________] County, Colorado. For Denver properties, the City and County of Denver is a consolidated jurisdiction.

21.5 Expenses

Each party bears its own costs.

22. METROPOLITAN DISTRICTS AND SPECIAL ASSESSMENTS

Colorado-Specific — Critical for Single-Tenant NNN:

Metropolitan districts (C.R.S. § 32-1-101 et seq.) are ubiquitous in Colorado, particularly for newer commercial developments. A single property may be within multiple overlapping districts, each imposing its own mill levy for debt service, operations, and infrastructure.

• ☐ Property is within metropolitan district(s): [________________________________]
• Additional mill levy from district(s): [____] mills
• Business Improvement District: ☐ Yes ([________________________________]) ☐ No
• Special improvement district assessments: ☐ Yes ☐ No
• Total estimated effective mill levy (all taxing jurisdictions): [____] mills
• Are metro district assessments included in NNN tax pass-through? ☐ Yes ☐ No — must be clearly stated in Lease

Practice Tip: Request the Property's most recent tax bill showing all taxing jurisdictions and their respective mill levies. Metro district debt-service mill levies can be particularly high for newer developments and may decline over time as bonds are repaid. The Lease should address whether anticipated mill levy reductions benefit Tenant.

23. ADDITIONAL TERMS

• Holdover: [____]% of last month's Base Rent, plus NNN.
• Default Cure: [____] days monetary; [____] days non-monetary.
• Self-Help: After cure expiration plus [____] days' notice.
• Casualty: Address hail, wildfire, flood, and snow damage specifically. If repair exceeds [____] months or damage exceeds [____]% of replacement value, either party may terminate.
• Condemnation: Per C.R.S. § 38-1-101 et seq. Separate awards; termination if unsuitable.
• Estoppel: Within [____] business days.
• Quiet Enjoyment: Landlord covenants.
• Memorandum of Lease: Tenant may record per C.R.S. § 38-10-112. Documentary fee of $0.01 per $100 of consideration applies to recording (C.R.S. § 39-13-102).

24. TIMELINE AND NEXT STEPS

25. PRACTICE TIPS AND COLORADO-SPECIFIC NOTES

For Counsel:

1. Void, Not Voidable: C.R.S. § 38-10-108 makes unsigned lease contracts void (not voidable). This is stricter than many states and means this LOI cannot inadvertently create a binding lease.

2. CDARA (C.R.S. § 13-20-801 et seq.): For single-tenant properties with build-to-suit or significant TI work, CDARA's notice of claim process is critical. Commercial owners can contractually waive CDARA rights — ensure construction contracts do not contain hidden waivers. The 90-day commercial NOC period applies.

3. Property Tax — 29% Rate + Metro Districts: Colorado's high commercial assessment rate combined with metro district mill levies can create effective tax rates exceeding 3% of actual value in some locations. For long-term single-tenant NNN leases, model the potential tax escalation over the lease term. Verify all applicable districts and mill levies before setting base year tax amounts.

4. TABOR: While TABOR limits mill levy increases, it does not cap assessed value increases. Rapidly appreciating Colorado markets (Denver, Boulder, Colorado Springs, mountain resort areas) can produce significant tax increases through reappraisal alone.

5. Radon: Colorado's elevated radon levels make testing essential for commercial properties, particularly those with below-grade or slab-on-grade spaces occupied by employees. Negotiate testing, mitigation, and cost allocation provisions.

6. Expansive Soils: Front Range bentonite clay soils can cause significant structural movement. For build-to-suit or existing buildings, require geotechnical reports and engineered foundation designs. Consider structural warranty provisions.

7. Green Building: Denver and Boulder green building mandates are expanding. For single-tenant properties in these jurisdictions, clearly allocate compliance costs for energy benchmarking, performance standards, and any required equipment upgrades.

8. Water Rights: Colorado follows prior appropriation. Water rights are property rights separate from land. Confirm water supply adequacy through the applicable water provider or district, and verify well permits and augmentation plans if applicable.

9. Broker Disclosure: Colorado's mandatory brokerage disclosure form must be presented before substantive negotiations. Transaction brokerage is the default. Confirm the broker's role and ensure proper written agreements per C.R.S. § 12-10-403.

10. Hail Insurance: Colorado single-tenant tenants in NNN leases bear the full cost of property insurance. Hail deductibles can be substantial (often 2-5% of insured value). Negotiate whether large hail deductibles should be capped or shared, and whether a hail reserve should be established.

SIGNATURES

Except for the Binding Provisions in Section 21, this LOI is non-binding.

LANDLORD:                                    TENANT:

Entity: _____________________________        Entity: _____________________________

By: _________________________________        By: _________________________________

Name: _______________________________        Name: _______________________________

Title: ______________________________        Title: ______________________________

Date: _______________________________        Date: _______________________________

EXHIBIT A — SITE PLAN AND BUILDING FOOTPRINT

[Attach site plan showing building, parking, truck court, access, and property boundaries]

EXHIBIT B — LEGAL DESCRIPTION

[Attach legal description or reference to recorded plat]

Sources and References

• Colorado Revised Statutes, Title 38, § 38-10-108 — Statute of Frauds (Leases)
• Colorado Revised Statutes, Title 12, § 12-10-201 et seq. — Real Estate Broker Licensing
• Colorado Revised Statutes, Title 12, § 12-10-403 — Written Agency Agreements
• Colorado Revised Statutes, Title 13, § 13-20-801 et seq. — CDARA
• Colorado Revised Statutes, Title 32, § 32-1-101 et seq. — Metropolitan Districts
• Colorado Revised Statutes, Title 25, § 25-16-301 et seq. — VCRP
• Colorado Revised Statutes, Title 25, § 25-11-104 et seq. — Radon
• Colorado Revised Statutes, Title 39, § 39-1-104 — Property Tax Assessment Rates
• Colorado Revised Statutes, Title 39, § 39-13-102 — Documentary Fee
• Colorado Revised Statutes, Title 38, § 38-1-101 et seq. — Eminent Domain
• Colorado Constitution, Art. X, § 20 — TABOR
• Denver Green Buildings Ordinance / Energize Denver
• Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.